Mr De Beer lodged a consumer complaint against the
Respondent’s online advertising.

The advertising states, inter alia,
that:

"Berlinger Haus 9-Piece Marble Coating Cookware Set -

R1,339

R3 837”.

COMPLAINT

The Complainant submitted that the Respondent advertising was misleading in that the advertised normal of the cookware set is not R3837, but R1399. He argued that this conduct is only discovered when one orders more than one item of the discounted products. The advertising creates an impression that there is a discount of 65% when in fact it is not even 10%. The advertised product’s normal price is R1399.

RELEVANT CLAUSE OF THE CODE OF ADVERTISING PRACTICE

In light of the complaint, Clauses 4.2.1 (Misleading claims) and 19 (Pricing Policy) of Section II of the Code were considered relevant.

RESPONSE

The Respondent submitted that it is not a member of the ASA and elected to respond to the complaint as it is a customer centric business and as a confirmation of its commitment to fair and honest advertising.

The Respondent refuted the Complainant’s allegation that the advertising on its website was misleading. It did so by clarifying the differences between the List Price and the Normal Selling Price. It submitted that the list price shown in respect of Daily Deal and other products on the website is the recommended retail price. The recommended retail price is suggested to it by the suppliers from time to time. This fact is made clear in paragraph 10.47 of its Terms and Conditions. Where a product is offered for sale by an independent Third- Party Seller on the Respondent’s website, as was the case in this matter, all pricing is specified by the Seller.

With regards to the normal selling price, the Respondent argued that Sellers are independent third parties who sell products via its website, and this is case Precision Cooking was the seller. Where a customer purchases a product sold by the seller, the Respondent merely provides the platform through which such transaction can be facilitated. As a result, Sellers have complete control over their product listings and more specifically their product list prices, normal selling prices and deal prices.

The Respondent’s investigated the matter and it appears that at the time that the product was part of the Daily Deal promotion on 21 February 2018, the Seller also lowered the product’s normal selling price resulting in a R60,00 difference between the Deal Price and the Normal Selling Price as pointed out by the Complainant.

The Seller was contacted and informed about the complaint was warned that its price adjustment to the product’s pricing was unacceptable and contrary to the Respondent customers’ best interests. The difference of R60,00 saving between product’s normal price and deal price cannot be justified as being a deal or saving. In order to avoid future complaints of this nature, the Respondent has instructed the Seller that it may post only deals where there is a significant (for example 20%) saving between a product’s deal piece and its normal selling price. Further, the Seller’s saving on any product it lists as a Daily Deal must be a minimum of 20% to List Price. It submitted that it trusts that the measure imposed will permanently prevent the listing that formed the basis of the complaint from appearing on its website in future.

ASA DIRECTORATE RULING

The ASA Directorate considered the relevant documentation submitted by the respective parties.

1.1the Advertising Standards Authority of South Africa (the ASA) has no jurisdiction over any person or entity who is not a member of the ASA and that the ASA may not, in the absence of a submission to its jurisdiction, require non-members to participate in its processes, issue any instruction, order or ruling against the non-member or sanction it;

1.2the ASA may consider and issue a ruling to its members (which is not binding on non-members) on any advertisement regardless of by whom it is published to determine, on behalf of its members, whether its members should accept any advertisement before it is published or should withdraw any advertisement if it has been published.

The ASA will therefore proceed to consider this matter for the guidance of its members.

Merits

Clause 4.2.1 of Section II reads "Advertisements should not contain any statement or visual presentation which, directly or by implication, omission, ambiguity, inaccuracy, exaggerated claim or otherwise, is likely to mislead the consumer”.

The Complainant submitted that the advertising was misleading as the advertised normal price of the product is not R3 837, rather R1399. A consumer will only discover the lower normal price upon attempting to purchase more than one item of the advertised daily deals. The saving on the normal price is not 65% and even not more than 10%.

The Respondent, on the other hand, argued that there are independent third parties (sellers) who list their products on its website and those are in control of price adjustments. The role of the Respondent in such situations is provision of the platform to transact. Its internal investigation discovered that the seller adjusted its normal price to a R60,00 saving which it considers to be insignificant in relation to its customers’ best interest. It proceeded to put measures in place, against the seller, to avoid future occurrence of such disparities in the savings. Such measures include assurance that the saving on a daily deal is not less than 20% and that there is a significant saving between the product’s normal selling price and product’s deal price.

While the Directorate notes the steps taken by the Respondent, the question before it is really this: is it misleading that the "R3837” is crossed out, when the normal selling price on the website is actually R1399, only R60 more than the advertised deal.

It appears that there are three prices in play:

The DEAL price is the price offered as the special discounted price available for a short time;

The NORMAL price is the price that the Respondent normally sell the product for;

The LIST price is the recommended selling price by the manufacturer of the product.

Next to the R3837 is a small "i" icon. When one hovers over this, it states, "This is our List Price. Find out what this means in our Terms & Conditions”.

The terms at Clause 10.4.7 say, "The List Price shown in respect of Deals and other discounted Goods is the recommended retail price suggested to us by the supplier of the relevant product. . .”. Clause 10.2 also clarifies that a Normal Price is the "then current (non-Deal) selling price on the Website”.

The icon next to the listed price on the website indicates that it has a special explanation. By hovering over this, one acquires access to what that explanation is. Most importantly, it would appear that the consumer is not misled as to the nature of the discount offered between the listed price and the deal price.

Given the above, it is the Directorate’s view that the Respondent’s advertising is not in contravention of Clauses 4.2.1 and 19 of Section II of the Code.

This aspect of the complaint is therefore dismissed.

Regarding the significant percentage of the discount, the Respondent took steps of guarding against the seller’s conduct by imposing expected standards on the seller in avoidance of future complaints of the same nature.

The ASA has a long-standing principle which holds that where an advertiser provides an unequivocal undertaking to withdraw or amend its advertising in a manner that addresses the concerns raised, the undertaking may, at the discretion of the ASA, be accepted without considering the merits of the matter.

This undertaking appears to address the concerns raised by Complainant, and it is therefore accepted on condition that the material is not used again in the current format in future.